Dave Ramsey: Teach kids about money early

Weekly financial Q&A, with advice on children and money, and “gazelle intensity.”

Dave Ramsey

Dear Dave,

How early should I start teaching my kids about money? Also, how do you feel about giving kids an allowance?

Cathy

Dear Cathy,

I think you should start teaching kids about money as early as you start teaching them about sex — which is the first time they show any interest. Make sure you keep it age-appropriate, and don’t over-answer questions when they’re young.

Neither of these things will amount to a one-time talk, because they’re both just parts of life. That means they’re ongoing processes that will last for years. If you have one talk at an early age with your kids about money, then they’re probably not going to remember a lot of it as they get older. If you have just one talk with your kids about sex at an early age, you’re liable to wind up with a bunch of pregnant teenagers!

To answer your second question, I hate the idea of an allowance for kids, because it makes the whole situation sound like welfare. We put our kids on commission at an early age. They had chores associated with certain dollar amounts, and if they worked, they got paid. If they didn’t work, they didn’t get paid. It was as simple as that. Then, they would split their money between three different envelopes — one for saving, one for spending, and one for giving — and we would teach them to do each one wisely.

Kids need to emotionally connect work to money at a young age. If you don’t teach them four major concepts — spending, saving, giving and work — you’re going to have major problems by the time they’re 10 years old!

No pain, no gain!

Dear Dave,

I’ve heard you talk to people about “gazelle intensity.” What exactly does this mean?

Del

Dear Del,

Basically, it means absolutely going crazy and doing whatever it takes for a little while to get out of debt. I’d much rather endure pain or discomfort for a short period of time and get it over with instead of living my whole life floundering around and accomplishing nothing in the process.

Some people probably think I’m using hyperbole when I give people advice on how to get out of debt, but I’m serious about it all. I’ve lived this stuff, man! There were literally stretches of years when we didn’t go on vacation or see the inside of a restaurant. If you want to get out of debt and get control of your money, you’ve got to be serious and intense enough to makes sacrifices on that level for a short period of time. We call it living like no one else, so that later you can live like no one else.

It’s not just dollars and cents we’re talking about here. It’s also about changing behaviors and mindsets. You don’t need to go to Disneyland every year. You don’t need to eat out every weekend. Until you’re willing to make temporary sacrifices like this — and become “gazelle intense” about taking control of yourself and your money — you’re never going to reach your goal of becoming debt-free!

For more financial help, go to daveramsey.com. You can also see him at 8 p.m. ET weekdays on Fox Business and hear his radio show weekday afternoons. Find a station or listen on his website.